Ask HN: How do I take my consulting business to the next level? | Hacker News Reader

Ask HN: How do I take my consulting business to the next level?

30 pointswildengineer18 comments

About six months ago I started my own one man software consulting company. Now I'm working for two clients making things and having a blast.

The problem is that these are subcontracts where I'm blocked from cultivating the relationship with these companies. I'd like to take my company to the next level, work directly with clients and build out my own team of engineers. Is there any playbook to do this? Has anyone here done this before? If so, how?

I've thought of networking at local events and possibly tech conferences, but I'd like a solid game plan before I invest the time and energy. Any advice is appreciated.

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Tread carefully, very carefully. The next level looks enticing when you are looking at it from the distance. But once you arrive, it can quickly turn into hell.

I have been in both sub-contract situations and setup a consulting firm with team of engineers, etc. The "next level" means that you spend a lot of time selling, negotiating, billing, collecting monies, managing your team, etc. Once you get to the level of 5+ engineers you are running a business full-time and won't have time to do any technical work.

What burnt me out was that clients are slow to pay, demand changes, nit pick, etc and I still had to pay my employees. With a payroll, insurance, biz costs of $120,000+ a month, things went south very fast.

If you hire the best staff you can get, then you pay a lot. If you try to hire cheaper staff then you end up having to fix up their mistakes, shortcomings.

These days, I sub-contract through companies that I have long-term experience and relationship with - they handle all the biz stuff and I can focus on the technical work. Their markup is worth it in terms of the work-life balance that I enjoy.

I highly recommend reading this: https://training.kalzumeus.com/newsletters/archive/consultin...

I second this recommendation. Value selling is how we made money in my consulting, hourly is a grind it out game. Also, value selling is what led us to be able to develop a couple of key products and eventually sell, if we had been grinding at some hourly rate I doubt we would've been able to.

Consulting is a feast or famine world. Cashflow and savings are key. The 2009 recession killed my consulting shop and friends of mine. Imagine having clients with 300 person companies downsized to 30 overnight. And invoices clients can’t pay, but employees to pay. To scale your revenue, you add employees. Some keys for success are to focus on an industry niche. Become the goto expert in that niche. Offer software and consulting in that niche and charge high rates. A good book on networking - thomas stanley, networking with the affluent. This would be my approach to $1m/yr consulting: https://news.ycombinator.com/item?id=5967255

> I'm blocked from cultivating the relationship with these companies.

The obstacle is way.

First Action: Get clarity on what your ideal target client looks like. Then reach out to them and start a conversation. See if there's a match-up.

There's an element of Sales Process here. On this subject, Mike Weinberg is brilliant.

See Chapter 14: Planning & Executing the Attack. > https://www.goodreads.com/book/show/15863998-new-sales-simpl...

I get wanting to have a plan but don't overthink it too much either. Get out and meet people and network. That is the only way to grow your network and get more work.

Also talk to your primary and ask them for recommendations to clients they turned down for being outside their target demographic. Also make sure you get your primary to provide you a written recommendation as early as you can in these projects. I know this sounds odd but all software projects will have struggles and I always found getting recommendations early meant I got much better ones then when schedule changed etc. Even if we were not at fault the recommendation would be less then I would have liked when I waited too long.

Last comment. As for your plan the one key thing to identify is your ideal client type, size etc. It is less about Technology and more about client demographics. This helps you create a target client list and start hammering the ground finding contacts in to them.

> This helps you create a target client list and start hammering the ground finding contacts in to them.

I don't have any experience in sales, but I'm eager to learn. Any advice on which content I should consume in this area?

Reading your responses to others too, you'll need to find your feet in sales quick before years end. Personally, I have grown and sold a couple of consulting businesses (failed at lots of things too). The key for me was never really which technology we used, it was always about finding a customer demographic I could target and where I had some expertise to help. We crossed nearly all industries but in general I targeted clients with a minimum of $1M/revenue per year up to $50M/year and less than 400 people and privately owned (non-public companies) -- including startups. The key is finding companies who have quick decision processes and who are not as formal as large public corporations generally. We did have a few large Fortune 100 clients as we grew but they were decidedly outside our target clients but we had expertise they would pay well for.

I always recommend people new to sales/marketing read "Crossing the Chasm", it has been continually updated and is essentially how to sell new technology products to the general market. While you aren't selling a product in the traditional sense, you are selling a dynamic product which is you and your skills. So while there will be parts of the book that seem not as relevant it will still help you get a broad understanding of how to market/sell your services. And think of the product as yourself, that's what you are selling when you are a one person dev shop.

I am happy to share my experiences if you have specific questions, I struggled starting my first agency as I didn't have anyone to ask questions to and just had to screw up a ton to figured out what to do. I was super lucky many many times that I didn't tank that business, but was within days of doing so multiple times.

Thank you. I will pick up that book. Perhaps I can send questions your way once I've digested all this advice and books?

Sure, you can find my contact details in my profile.

A rule of thumb here. Companies with 20-30 employees can afford $75-125/hr contracting rates. And these smaller companies will take less time to sign contracts and start.

1. What industry are you after? You have to choose a vertical or you'll waste a lot of time being everything to everybody.

2. What technology service are you offering?

3. Knowing #1 and #2: Network with business people (not tech people) in events. Business people are the stakeholders, not some engineer that works at the company.

4. Your sales cycle could very well last over a year. Do you have enough funds to cover that?

5. Read this recent thread: https://news.ycombinator.com/item?id=19876825

1. I haven't picked an industry. I've been working with a startup in adtech and the other a significant player in the digital content provider space. Do you most clients expect extensive experience in their domains?

2. As for service, my technical focus is on all things backend, but also advise my clients on best practices at all phases of development. I want to eventually build a team to cover the full stack and QA.

3. Very good points and advice.

4. I currently work on these contracts. One of which should carry me through the year, but I don't have the cash to float myself for any longer than 3 months. I expected to work near full time while I work on sales. Also I don't know much about sales. Any content I should be reading?

5. Thanks I'll take a look.

1. No, but it helps to know their industry. It really sets you apart.

2. All things backend using what technologies? (language, databses, frameworks etc)

I can't name it all but here's the main stuff...

Languages: Java, Scala, Python 2&3, Javascript/ES6/Typescript

Libraries/Frameworks/Middleware: Spring, Java EE, Spark, Flask, Pandas, Pyspark, Node, Kafka, Redis, Memcached

Databases: The popular SQL dbs (SQL Server, Oracle, Postgres, MySQL) and NoSQL (Cassandra and Mongo).

I also have alot of experience with Azure and AWS offerings, including serverless.

That's quite a list of technologies for one person to sell. Narrow it down to the most in demand and market those. Only do the rest as a value added service.

I would consider productizing and packaging your service...

step 1. be careful what you wish for.

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